Upgradeski – the art of business class travel in Russia

Written in the business lounge at Moscow Sheremetyevo Terminal 1c (no wifi provided!) but posted from Kyiv

As either reader might recall I don’t much like flying. Terrified wouldn’t be a wholly inappropriate word; which makes one wonder why I have chosen the job I have. Anyway…

This morning I flew to Kyiv (the overnight train wasn’t an option this time, as I had a date at the Bolshoi last night). Being driven out to the airport, the weather deteriorated and I began to get that shuddering yawning that only comes, oddly, when I am very nervous.

The airline I am flying, while using Boeings, uses old ones. Old. Using my handy databank on my PDA, I will verify that the actual plane is between 25 and 30 years old (which is typical for the airline I am flying, for this route): they even still fly one which is now 33 years old.

Since this flight is only 100 minutes airborne we always buy economy class. But I decide to upgrade, at personal expense, to business. There are two reasons of logic for this:

- being personally convinced I will one day die in a plane crash, I would prefer to do it in business class (at least you’ll have more comfort for the last moments before the cleansing, ending bath of fire and the eviscerating shards of metal…)
- And the survival rates in business class are poor. In the event of a serious incident you will die, but it will at least be quick. Behind the curtain is the possibility of agonizing survival; or not quite.

So I arrive at the airport and go to the ticket desk to upgrade.

Sad smile and shrug; says he: “it is impossible. Komputers all no work today. You pay cash?”

Gentle frown before helpful smile, says I: “Gosh. How unfortunate. Yes I pay cash”

Eager school-boy frown, I continue: “Perhaps if I pay cash you can sort out all the paperwork when your computers work again?”

Light-bulb moment: “yes, that might work. You come with me”

We set off and find an official who may be Airline or maybe State but, as is often the case in Russia, is probably a bit of both. I am a друг (friend) apparently. That’s nice.

A sum is ventured (“the official fee of course”) and a small cash transaction occurs discreetly, elegantly: it is what passports are for.


Holding my passport and new ticket (“sorry, mister, no receipt possible; Komputers all no work”), 10 minutes later, this official (partly Airline, partly State) walks me through customs; with much shaking of hands. I am asked no troubling questions.

I am led to check-in and am checked in immediately, ahead of everyone else (mercifully, at this moment all the Komputers seem to have begun to operate again!). I say goodbye to my friend and settle into this lounge, after being assisted through Immigration. I look at my ticket and boarding pass. I am now, it seems, a government official with a VIP pass.

This being me, a thought crosses my mind. If something does occur, and they’re identifying my body, they’ll wonder why, with my British passport and my un-Russian name, I was on seemingly on Russian state business.

That is how conspiracy theories start.

Postscript: Plane registration UR-BVY is, in fact, just 6 weeks short of its 26th birthday.

Quick aside: UKRAINE - What is La Orangina up to now?

I refer to Prime Minister Yulia Tymoshenko of Ukraine. She has this morning adopted that most noteworthy of Ukrainian political tactics 'being rushed to hospital'. Ukrainian politicians are always being rushed to hospital, unavailable from their sick beds, rather than be in a position to do, or not do, anything when put on-the-spot. For Ukraine-watchers, it is a frequent tactic.

The newswire of Business New Europe takes up the story:

"Ukraine Prime Minister Yulia Tymoshenko is hospitalised with flu, according to statements made by Ukraine's vice prime minister Oleksandr Turchynov on Channel 5... President Viktor Yushchenko had charged her with full repayment of Ukrainian debts to Gazprom before a deadline of 10 a.m., March 3, but her hospitalization looks set to stall this.

""Being a woman of character, she tried to come to work again and was taken to hospital literally from her workplace," Turchynov said. Her hospitalization follows Yushchenko sending a telegram to Prime Minister Yulia Timoshenko yesterday, stating that she had failed to adhere to the Moscow agreements and demanding, according to Interfax, she "take urgent and exhaustive measures to pay Ukraine's debt for the gas consumed. The government must fulfill all high-level agreements."

"Tymoshenko was due to personally report to Yushchenko on implementation of his order's execution today at 9 a.m, according to Kommersant. Whereas Yushchenko reached an agreement February with Russia President Vladimir Putin and Gazprom for Ukrainian gas distributor Natftogaz Ukrainy to repay its debts, Tymoshenko has been dragging her feet over implementing the agreement, causing Gazprom to set a deadline for March 3, after which gas supplies to Ukraine will be cut by 25%."

Meanwhile, excellent UKR blog, Foreign Notes, today has a heart-rending little crie de coeur about the stress she is under: 'no wonder she is ill' ...

Why of course, March 3rd.

The day after (Gazprom Chairman) Dmitry Medvedev - who's been trying to cast himself as a progressive - wins the Russian Presidency by a vast landslide, the world is reminded of how horrid is the Russian bear as poor defenceless, pro-Western, 'European' little Ukraine has its gas switched off (sic) again by big, bad, greedy Gazprom.

It's propaganda people: from Langley to Kyiv by way of Wag the Dog.

How dumb do the US-funded Russophobes think we all are? Dumb enough, I guess, dumb enough. Because you just know the wailing the BBC and others will plod along with.

The Mariinsky on tour to Moscow: three one act ballets

A sell-out house at the Bolshoi on Monday night to see the Mariinsky, on tour to Moscow as part of the Golden Mask festival, dance three one act ballets.

And an interesting choice for the three:

- Serenade; the George Balanchine® piece - no, really, the Balanchine Technique is actually a registered Mark in the USA. A clever thing to choose because the Bolshoi has this piece in repertoire too, so we’re all invited, in the home crowd, from the outset, to compare the Mariinsky to the Bolshoi

- In the Middle, somewhat elevated – a assertively modern piece designed to show that the Mariinsky is cutting edge too (take that Alexey Ratmansky! – who, BTW, is *leaving the Bolshoi* at the end of this year – that’s a shame because I love his work; but the Bolshoi’s not feeling the love, one hears)

- Le Réveil de Flore – a museum-piece confection, in case the traditionalists were still shocked by the previous work, and an unmistakable reminder that the Mariinsky is the senior, Tsarist Russian dance company, so-to-speak

I am not sure that these three fit lovingly together as an ensemble; but as a statement of the Mariinsky’s artistic range and methodic dexterity, it was effective.

Serenade (choreographed by George Balanchine®, set to Tchaikovsky’s 'Serande for Strings in C major' (op.48)

First off I should say that the Mariinsky’s Pavel Bubelnikov conducted (their?) orchestra beautifully and it was as though I heard this piece – which I know well – for the first time.

My program notes included:

- “Balanchine – it’s all about the fingertips!” – well yes, he put great store in the way the dancer use the tips of the fingers and, indeed, the placement of the feet. Slightly artsy, but nice.

- The principal hero: “walks like a cat” – not sure that’s a hugely meaningful insight into the dancing of Denis Firsov but, yes he does

- In the Elegie, which in this balletic presentation of this music is what they end on (reversing it, in the actual order of the Tchaikovsky piece, with the ‘Tema Russo’), there’s a sort of apotheosis moment, with one ballerino and two ballerinas. This includes the wonderful Viktoria Tereshkina (I think, I don’t know the Mariinsky cast by sight the way I do of the Bolshoi’s). I just loved the way one ballerina stands behind the ballerino and just uses her arms and, suddenly, he is a flying angel.

I was also struck how the Mariinsky cast seemed larger, stronger than the Bolshoi cast for this piece and so I perceived Serenade as being much less limply, chocolate-boxey than previously I have judged it. On this showing, it *is* done better by the Mariinsky than the Bolshoi (controversial, but c'est la vie).


In the Middle, somewhat elevated (choreographed by William Forsythe, set to [the then young] Thom Willems’ piece of the same name)

- horrible music! Migraine inducing. Not played by an orchestra, but from tape, we are reminded that the Bolshoi New Stage’s sound engineer should be stripped naked, thrown into the snow and horse-whipped. The architecture of the electronic sound scheme at the New Stage is piss-poor and the speakers kind of slam the music into you.

Actually, heard from the Net, the music sounds much better than what we had to endure on Monday night. Willems and Forsythe are long-term collaborators but I am not sure that the poor sound-staging demonstrated Willems at his best on Monday.

- BUT as “a piece of art” (as a colleague, who also happened to be there that night, said to me), it is quite spectacular. The Soviet style of ballet is very strong, almost athletic, and this is a piece requiring the enormous physical strength of all the performers and suits dancers brought up on the choreography, and under the artistic dictatorship, of Yuri Grigorovich)

- Lead Mikhail Lobukhin was Herculean in this piece and his body produces taut counterbalance-and-pully for his ballerinas, before effortlessly segueing into limpid fluidity. He has that slightly cocky, but beguiling, mixture of graceful elegance, passion and raw attitude, that reminds me of Nureyev at his best.

This piece stayed with me for several days after I saw it. There are several extracts and versions of it on YouTube.

All glory to YouTube, there’s a short exert of the piece nicely introduced by the UK’s now sadly retired prima ballerina, Darcey Bussell. I never saw her dance live… (sniffs). It's been blocked from embedding, but you can find it here.


Le Réveil de Flore (choreographed by the great Marius Petipa, the ‘father of all ballet’, set to a piece of the same name by Riccardo Drigo)

I am not a huge fan of this sort of ballet, but the home crowd laps it up. It is, though, a fine example of high classical ballet, and the Mariinsky does it extremely well. Personally, I think it has more camp than a tribe of Bedouin, but that’s just me.

Ripped from YouTube (and captured by someone naughty who recorded the Mariinsky illicitly – I don’t approve per se, but it is sure useful for these posts) is the opening (and the YouTuber has some useful notes on the ballet actually, if you double-click on the link to the original YouTube page):



While not a triumph, it was a successful exhibition night for the Mariinsky. Artistically, I am not sure the Bolshoi is yet quaking in its boots, but in terms of technique, one is reminded that even the mighty Bolshoi has better not be complacent. The Mariinsky demonstrated technical excellence on Monday.

Advance Notice (warning): It is going to be Russian ballet week on 'Moscow Rules'

... because we are in the middle of the Golden Mask festival.

I have a backlog of postings.

I am trying to edit a post on 'The Seagull / Chaika' I saw last Friday, at the Stanislavski-Nemirovich-Danchenko. The draft post is called "De-coding the choreography: sex, death and Chekhov in the ballet of John Neumeier". Truly, Kids, it'll be worth the wait... LOL!

I also want to review the Mariinsky performance at the Bolshoi tonight. How was it? Well, as they say in my part of Italy: "cosi, cosa... cosici"

Some of it reminded the world St Petersburg is very intellectual, natch. Some of it, though, reminded us that St Petersburg hasn't had a compelling, new idea since 1932... Anyway...

Below is the Mariinsky's equivalent of the Bolshoi's In the Upper Room (I have written about the latter endlessly on this blog, so use the search function!): In the Middle, somewhat elevated. Of more to be written later this week.



(Piece from Russia's Kultura TV)

PS: And tonight via YouTube I learn that Andrey Merkuriev - one of the Bolshoi principal soloists I most admire, only joined 2 years ago from the Mariinsky. I learned it because he is in the YouTube snipplet I have included by way of teaser (this is about 1/4 of the way through the piece).

Why Russia is right to feel the sky may fall in on its head

As you may have noticed, it has all gone a bit Battlestar Galactica in the world right now. Russian Strategic Nuclear Forces blog is the hero of the hour, for nuclear holocaust hobbyists and those playing catch-up alike. Just brilliant.

Russia understandably kicks off a storm because, for all the post-Soviet rearmament rhetoric, the Russian space program is not what it wants it to be. Also, the Russian nuclear ICBM targeting system is satellite-dependent of course. Ivan-Ivanovich has some nice big, shiny, glow-in-the-dark, new city-killers – all of which are absolutely useless if, suddenly, the forefront of big boys’ war really moves into space.

Because remember:

- 1.5 million men under arms is irrelevant given that every play-book on the planet assumes that military conflict with Russia goes nuclear within the first 24-hours
- And 1.1 million of those men are sullen conscripts of uncertain efficacy, maybe over 25% of which even the most optimistic Russian commander reckons are utterly useless

No military satellites = Russia left defenseless. That’s the simple, brutal truth.

IMHO, Russia *talks* anti-US/NATO threats to Russian territory, but this is misdirection. It is just simply incomprehensible that NATO would ever be the aggressor; even if Moscow bombed Tbilisi (which I think will happen, anyway).

But China decides to invade east of the Urals? That is what the Kremlin really (rightly) fears, says I, one day hence. Russia is making way too much money out of the Chinese market right now to say so publicly, but it fears its eastern neighbour; just as the EU/NATO fears its, in turn. Why would China do that?

For China, finding fresh water is, by far, the biggest macro-political, or rather, civilization risk it faces. Oh yes – on just a “where is our fresh water” scenario – that has to be a meaningful statistical possibility that between now (OK, not 'now', but 'five minutes into the as-yet-unembraced future') and 2040 a desperate China seeing a demographically weak Russia just goes for land east of the Urals. And killing Russia's military saltellites is how they start to do it. Moscow knows that. This is what military planning is all about (and why it is so cool). You issue press statements attacking Washington DC, knowing Beijing gets the message too.

PS: What I heard last Friday, from a St Pete’s Siloviki clansman, in serious state employ, was 100% the complete opposite of the Moscow Times front page today. I shall – at risk of (more) ridicule – make this prediction: Mayor Luzhkov will retire by the end of 2008.

PPS: I posted before – actually, if I may say so within 8 hours of its release I think - about the Obama/YouTube song that may well be (wrongly) described in history as the zeitgeisty turning point in his campaign.

Don'tchajustluv this spoof? Pure, adulterated and wicked, splendid genius. I cried laughing:

PPPS: Apropos my last post, my long-suffering employer points out that, au contraire, in the event of crash-evac a private plane would have been guaranteed for me but, since “you are always prattling on in your blog about your fear of flying, we thought you would actually appreciate going overland! And - hello? - you’ve also blogged before about the wonderful security service we generously provide you”.

Point taken. They’re lovely. I'm indulged. Now feel like spoilt selfish git. Also must stop writing like male Bridget Jones. That ship may have sailed...

Another reason to remain cheerful about Russia

Yesterday a colleague emailed me:

“[the client’s] CEO was shot (but not killed) last week, so the [deal] is a bit postponed :( ”

(I think adding the emoticon is a nice finishing touch, don’t you?)

This one line email gave me a bit of a boost as:

- The guy lived, right?
- It has been ages since a client of mine has been shot; years in fact, which illustrates that the so-called Wild, Wild East is becoming a normal business environment just like everywhere else (oh yes! Brittle smile… )

In fact, this email came from our Kyiv office, which is an even more important reason to be cheerful for Russians therefore. No nasty shootings with our Russian clients, oh no! But in touchy-feely, oh-so-democratic Ukraine? Um… business-by-bullet is still occasionally an issue there.

Probably there is no more eloquent testimony to President Putin’s success in bringing order and safety to Russia than the fall in the numbers of (intentional) corporate killings. And when it happens, it’s screamed from the front pages and everyone is very shocked. Actually I bet business-by-bullet is more common in the USA than here…

PS: the actual story of who shot the client and how, is… er… very funny, but there is no way I can repeat it here. Just suffice it to say long-liquid-lunches and an Uzi-semi don’t mix: as ‘props’, to make a point in a post-lunch debate, they are more ruinous than rhetorical.

Actually, come to think of it, our ‘track record’ is pretty good here. Racking my brains I don’t think we’ve lost anyone ‘on-the-job’/client-wise due to corporate hits; excluding, a tad before my time, an incident in Georgia.

There, I think, the client CFO was murdered and we instigated, for our people, a ‘crash-evac’ (as one past employer of mine called them); or fast extraction. You know the drill: beefy body-guards, armour-plated fast cars, private plane… Damn! Very cool…

Well, at least that is how a previous employer conceptualized the process. Not sure about my current one though (bus timetable and overnight train to Finland is perhaps more likely if trouble came my way… and I would have to buy the bus ticket).

Other than "shots fired!" (a shoot-out by my chauffered-Merc) in Kazakhstan, in the 1990s’ aluminium wars – advice that day to me from then British Ambassador: “We cannot guarantee your safety and we recommend you leave the country. Today please, if you can.” - and lock-down / petrol bombs in Haiti, my life has actually been rather sadly suburban.

Although there was the anonymous delivery of a ‘black silk mourning’ tie to my office on my arrival – just weeks after I shafted a well-known Russian oil company on a big deal in Turkey – and a petrol-bombing in my elitny street, one summer’s night. But, hey, that happens everywhere, right?

Favourite word of the day? ДЕМШИЗА – Demshiza; a nice mélange of democrat and schizophrenic. It’s what United Russia-types call the pro-Kasparov loons. Seemingly, with cause.

Awaiting the grim certainty of revenge

(The Cartoon above – and elsewhere in this post – is from the Opinion page of the London Daily Telegraph. This is from 14th February; spoofing a movie poster seen in London right now).

Tonight, with gunshots into the air, Kosovo declared independence. I wish this pseudo-State, or its people, no harm. But I do not welcome it. As I have said before, I supported maintaining the territorial integrity of Serbia. As I type this there is sporadic, maybe even half-hearted, rioting outside the US Embassy in Belgrade.

Of more consequence will be Moscow’s response. On the face of it, this is a major (and personal) foreign policy failure for President Vladimir Putin, some will say. Personally, I think that harsh: the die was cast in the last, chaotic months of the Yeltsin misrule. By the time VVP had established internal order in Russia, the Russian state was far too behind, with too few moves, to succeed in the Balkan game.

But there will be a response from Moscow, all the same. Just weeks from the electoral coronation of his handpicked replacement, President Putin, will take deeply, red-mistly, personally the West’s united ignoring of Russia’s voice. If only for his personal sense of dignity, the Russian President will demand a price is paid. Recognizing the independence of Abkhazia and South Ossetia – and thus fracturing Georgia – is just the start of it. Personally, I think it gives more impetus to create a second USSR, starting with the integration of Belarus and Russia; and the incorporation of Abkhazia and South Ossetia.

The grandstanding President Saakashvili of Georgia – never knowingly under-exposed on CNN this one – will mewl and howl over the airwaves; but in truth no-one will take a single meaningful step to stop Russia if it does this. Who would be so stupid? OK, so the Harry Potter of global diplomacy might be; this would not surprise me. I suspect things will be become clearer in March. Revenge being a dish best served cold and all that…

Can anyone tell me what was up in central Moscow this weekend? After four years here I am used to random deployments of troops, but there were just so many in town this weekend. Taking the Tverskaya underpass from the Actor’s Gallery to home, there were about 50 Militia conscripts herded under here, soaking up the warmth. In their super-padded blue jackets, these boys (who all looked about twelve), momentarily appeared to be the hybrid offspring of a teletubbie and a smurf. However, around the corner from my street were two truck-loads of OMON. Now these dead-eyed, muvver-fukkers get my repect. I have no doubt they would disembowel their firstborn, if so ordered by the Chekists.

It has been a weekend when I am very conscious of the few ‘touching points’ between Russia and the west right now. There are few certainties to hold on to and I sense something nasty coming our (expat) way. At the top of my blog, it says my life is a ‘slalom’ between the politics of east and west. And this is increasingly true.

While they all pretend to be too sophisticated to be duped by it, the slow drip-drip of state media poison has noticeably changed the way my staff relate to the idea of the west (other than a place to shop and vacation; which they all do with enthusiasm).

Just a week ago, one young staffer emailed the office an offhand comment about ‘western companies raping Russia’ – this from a lad whose salary, all paid 'white', with health insurance etc, has more than tripled in three years. We’re the firms raping Russia? ‘Cos all those oligarchs have done so much for the well-being of their fellow-citizens…

Next time I get a lesson in Russian patriotism from him I must remember to ask when he is planning to fulfill his conscription duty…

Then, a couple of nights ago one of my senior staffers emailed me (about UK-Russian relations): “Give me a break! We've always been enemies and will remain enemies. Even Americans are much closer to us than Brits.”


To which I felt the need to reply:
"Oh. Fuck off dearest mate [he's one of the few staffers I would call a mate and he knows I swear at him with English Middle-class, fruity affection].

"That’s balls, as even the briefest consideration would remind you, it was the USA that murdered the USSR in the Afghan war. The UK just provided tea and crumpets for that dispute.

"Like most Russians, you are still beguiled to think that Britain is your enemy because you have read too much ‘Great Game’ nonsense (and the televised novels of Boris Akunin).

"That said, like the Roman Empire, both Russia and the USA are two ‘empires’ whose sole raison d'être has been that the state serves a primarily military-elite. You are right: the USA and the post-USSR are the same: and as D H Lawrence (a good socialist, and anti-communist and hero of mine) once so memorably put it: “between the two blades of that pair of scissors, we shall all be cut to bits”.

A political friend in London – reading over this exchange -sagely reminded me of what Lord Palmerston said: “Nations have no permanent friends or allies, they only have permanent interests.”

The anti-western, default thinking of Generation Putin is becoming more deeply entrenched and is not going to go away. Those western governments and analysts who think the risks of a sabre-rattling bear reduce with Putin exit stage left? Completely misreading, they are, the changes in Russian society.

To cheer myself up, though, I have spent the afternoon downloading, from iTunes, digitally re-mastered arias by some of the great, now sadly dead, sopranos. And in my head is a civilized, safe place, where no-one can get me.

The current market rate for bribes in Russia – an English translation – and Russia: has it got the power?

I had a staffer put this together for me today (posted alongside); the current (alleged) tariff for bribery in Russia (overall I think it is 15-20% light of real costs, but that is IMHO, so there).

Across my screen today I also saw a Deutsche Bank piece:

Electricity and heat supply outages across Russia
Deutsche Bank

February 14, 2008

There have recently been a number of accidents across the country resulting in temporary electricity and heat supply outages. Interfax reports that an equipment failure at the Carevskaya power substation in the Astrakhan region led to the electricity supply for almost 36,000 people being interrupted. Separately, the Krasnoyarsk governor blamed poor maintenance works at Eniseiskaya TGK for a number of failures in heat supply this winter, Interfax reports. There was also a fire at CHP-1 (TGK-14) in Ulan-Ude.

In our view, nearly all these accidents were the result of more than a decade of underinvestment in the sector [Exile's emphasis]. However, thanks to privatization and the liberalization of the sector, a significant amount of money has been raised for capex needs in almost all of sub-sectors. Nevertheless, such accidents highlight the technological risks of the sector and as most of the grid's and generation equipment is worn out, we cannot exclude there being further outages in the future. -1-140208

Heretofore, Anatoly Cubais’s great ‘unbundling’ of the Russian power monopoly has made middle-ish management, of variable talent (variable, because some are world-class), rather staggeringly rich. It is to be seen if it will be remotely effective in keeping Russian lights or furnaces burning bright (let alone Moscow AirCon systems running cool in summer) in the years to come.

Although not presently (yet) directly a fee-related interest, I am following the Russian GenCo-Distribution systems carefully (I cut my industrial-political teeth, as a lobby-ling, on the European gas and nuclear power sectors).

In 2009, I think one of the more conceptually interesting IPOs will be Inter RAO: the electricity trading arm of the dying behemoth, RAO UES. As I have written for someone elsewhere (not on the web), hydro-power from Kyrgyzstan, grid-linked to Russia, looks a good PPP/PFI investment bet. Ditto, strategic partnerships for foreign firms in the GenCo sector, prepared for an ‘RPI+/-x’ long-term-like concession.

Indeed, if Europeans can put aside their mono-dimensional bleating about ‘energy security’ for just a tiny moment, they will see (as I write in one of those rather dry, slightly neo-con-ish, US geo-political journals next month):

‘Energy security is a two-way street. Although we think of Russia as an exporter of oil and gas it is, and will increasingly become, an electricity importer. Over the three electricity Russian IPOs/privatisations we have worked on [in 2007] during the break up of the RAO UES monopoly, we see how truly inter-connected Europe’s energy markets and energy best interests are.

“Russia’s own electricity needs mean that it is already importing electricity from Kazakhstan; and shortly will import – in scale – hydro-electric power from Kyrgyzstan. The RAO UES subsidiary, INTER RAO (itself a likely IPO candidate in, perhaps, 2009) is the fascinating business that imports all this power, and looks enviously at the possibility of importing electricity from the generators of Central Europe; if only it can raise the billions of Euros necessary to build the inter-connecters between Russia and the CEE nations [Exile: which is now the reason why Gazprom is looking to buy European GenCos -they are buying Russia’s energy security for 2015+ ].

“So let us all conclude that energy security is a two-way street: raw materials in one direction and electricity in the other. In fact, in any debate concerning energy security it is good to remember that very few people come to the debate objectively and without an agenda. The EU institutions want to control one of the largest aspects of the EU combined economy, national sovereign determination of which member states have jealously guarded. Russia is frequently criticised but perhaps should do more to put forward its own case.”

As is unfathomably often the case for hydrocarbon-rich countries, Russia is hydrocarbon rich, but electricity poor (the same is true, BTW, for Saudi Arabia, Iran, Venezuela and even Kazakhstan).

And in Russia, this electricity ‘poverty’ is really beginning to show. This is an area that takes more than six months’ central pump-priming, highly visible, Kremlin investment to cure. Not least as, for Russia, GenCo infrastructure is only part of the challenge. It’s the ‘wires’ and the sub-stations too: now that’s fiddly and relatively expensive to do and… er… becoming really quite vital to medium-long term, Russian economic vibrancy.

PS: understand this sector and you see that Kazakhstan’s interest in buying some of Westinghouse is, actually, very, very clever.

The price of doing business here?

After a great weekend in the North of England, which was looking wonderful in uncharacteristally bright Spring (?) sunshine, I came back to flu and have been in bed asleep for most of the last two days. I don't know what they put in Russian Coldrex, but Damn! it is good.


While I have been asleep, a colleague forwarded me the table here, which appeared in Vedomosti on Monday. The article and table is about the current going rate for bribes people have to pay to do business here in Russia. The original article, in Russian, is here (and the table is more legible if you click on the link in the article).

But the point is: $250,000 for proposing a law (yeah, but a good $1-2 mill to get it passed mate); a 30-40% cut for commercial participation in one of the Priority National Projects; $20,000 retainer to TV news for criticism of targeted bureaucrats; etc. These are allegedly the going 'market rates' for bribery presently. They feel about right to me.

Although, in my experience (anecdotal, natch), TV news editorial-judgments are becomming a lot more expensive than that; and to get your man spotlighted positively on one of the main Russian current affairs programs? $150-200k I am told.

Although, oddly, this sort of thing has never crossed my path directly; from what I am hearing bribery rates have gone up for Russian businesses recently, as the current ruling elite are looking to... ahem...monetarize their experience, just in case political change will follow Medvedev into the Kremlin. As has been written well elsewhere, there may not be much of a democratic race on in Russia at the moment; but the clan wars amongst the Siloviki are as hard-fought as anything right now between Obama and Hilary.

This story about the market for bribery, did remind me of the depressing front-page lead in the Moscow Times yesterday, on the rise of 'raidering' in Russia. Now generally, 'raidering' is something I associate with Ukraine, where it is rampant. I had thought it was on the wane in Russia; and I think it is in the larger corporate sector; and not something I think will greatly affect western businesses. But it does, on the other hand, provide more ammunition for those who would say that Russia has become a state which exists by, for and of the modern-era Chekists. And, to the extent that anyone serious about doing business in Russia needs to have employed at least one seriously-well connected ex-KGB/FSB officer, I guess I reluctantly agreeing.

Something for the weekend

So now I am off to the UK, family business, and this is what I have packed for my weekend reading:

- “Continuity in Russian regions: How ‘Operation Successor’ is working in key regions and what it means for international investors - Tatarstan” – and note I have finally learned how properly to spell Tatarstan in the Roman alphabet!
- “Distributed Influence – Quantifying the impact of social media” - an Edelman white paper
- “A power audit of EU-Russia relations” – a policy piece from the European Council on Foreign Relations, one of its co-authors is Mark Leonard. He and I once got cautiously drunk, as I recall, at a Labour Party annual Conference - 1996 or 1997; in Blackpool or Brighton (they all merge into one hideous memory)
- “Social costs of smoking and the impact of tobacco excise duties”; an academic study from Hungary (!) – it comes with a handy second volume of Excel spreadsheet data
- “Value at the bottom of the pyramid” (a refutation of ‘common misconceptions about doing business with low-income consumers’) - from the IE Business School in Madrid.

And I wonder why there is so little joy in my life… LOL!

Off topic: Stamina required! But then, On Topic, Russian economics

Since the man who is going to win the Russian Presidential Election, by a landslide, doesn’t really feel the need to campaign, I wanted to post some personal observations about Super Tuesday, since it is the only electoral ‘race’ I am going to witness this year.

As the Democrats seem set for a long-drawn out slog to determine their candidate three factors will become increasingly important.

Money talks: after an initial barn-storming start the Clinton campaign has been slower to raise money; whereas Obama has drawn in millions in the last three months. Using CNN’s last quarterly data, it looks as though Clinton should be pretty safe; but in the last six weeks, Obama has raised more healthily than she. Hillary Clinton did better than ‘Big Mo’ predictions (including mine) suggested; and this may help to shake the money tree some more for her. But in a long campaign for the nomination, Obama may be advantaged by the fact that he will be able outspend Clinton in the later stages of this race.

Clinton as at end Q4 2007 (CNN):

Obama as at end Q4 2007 (CNN):

This Democrat desperate spending spree is great news, BTW, for the Republican nominee, come the… you know… actual General Election.

Lack of downtime can lose elections: I have personal experience of this! The Democrats may find they do not have a clear winner by the end of May. This is a disaster for the party! There is every chance that, when we get to the Democrat Convention (Denver, August), it will be a ‘brokered convention’. The eventual nominee will be exhausted – mentally as much as physically. Meanwhile, the Republican candidate – looking more likely to be McCain – will have had a good 2-3 three months to rest (no need to campaign while the Democrats are still slugging it out) mentally and physically, and hone their national campaign message. Hate Bush as many US citizens do; there is now a growing possibility that McCain can beat Clinton, and I think even more likely, Obama, either of whom may both enter the race weakened.

Money talks here too. As the Democrats soak up more and more cash from their wealthy backers for the Primaries, that necessarily presents an opportunity cost for the General.

The White stuff : Early break-out stats suggest Obama is gaining white votes – and how sad that this should be a factor – but he is still to break 40% of white voters in the Democrat primaries to date. Again, this is good for the Republicans. Especially if McCain – once he has the nomination – campaigns on a ’50-state’, more centrist strategy. The Right will hate this, but they will fund it rather than see Obama in the White House.

US voters enjoy balancing the ticket – one party for President and another for Capitol Hill. I think the odds of a McCain one-term Presidency, albeit with a Democrat-led Senate and House, are looking shorter.

PS: Exile says Huckabee for President in 2012; because even if he can do it, McCain can only be a one-term President. And Huckabee’s knee-capping of the Romney campaign yesterday? That must have earned him the VP-slot in a McCann candidacy (nicely delivering the South as it does too – and keeps Anne Coulter-types off of McCain’s back).

Russia today? Nada caught my eye except: rotten inflation stats for January and a shrinking current account surplus; with RenCap forecasting the current account surplus will fall to zero by end 2009. Like I have said before; supply-side economics are out of kilter with domestic demand and 1-2 years from now, the Russian government is finally going to wake up to this fact, against generally weaker commodity prices: which is 1-2 years too late. As we enter 2010, ‘cheap money’ in Russia is going to be hard to find; the major western economies will still be weak and so where will inward investment in Russia come from then?

Does any of this matter? LOL! Maybe not. But put it this way. If I was the head of a global hedge fund, on a quarter-to-quarter view? I would now be overweight Russian stock to the global equity index I use and would increase my tolerance to Ruble exposure.

But, if I was global chief investment officer of a pension fund? I would be looking at a structural position underweight Russian equities, compared to the global index I use, and much less tolerant of RUR exposure, over the medium term. And, yes, I might be buying some more gold.

Arts update on the Bolshoi… oh, and something new on Tartarstan

I have finally caught up with the sadly inevitable news that the Bolshoi’s main stage – under restoration since 2005 – will have its opening delayed yet again. At least, though, I shall still (just) be here to enjoy the old girl again. Before it closed, I only went there about a dozen times and, in retrospect, it is kind of worrying that the cracks in the building were so bad we were all, in fact, just one overly-resonant top ‘C’ from the great chandelier coming crashing down on us all in the Stalls.

And to think much of the real damage was done to the old girl from the ground-crackingly deep extension being built next door at Tsum. I hope someone has sent Tsum the appropriate bill…

Bolshoi snobs decry the ‘New Stage’, where the Bolshoi hangs out these days. Actually I quite like it. Sight-lines and acoustics are fine. Well I usually sit Stalls’ rows 1-5 for ballet; 5-10 for opera, so from there it’ll always look and sound superb.

There hasn’t been a huge amount on this month to grab my fancy; but in the last week of February I have booked:

The Mariinsky (formerly known as the Kirov - the naming of it is a tale in itself), on tour at the Bolshoi. Thusly to reignite that old debate, ‘which is the better ballet troupe? Bolshoi or Kirov?’

I have also scored, from my usual dealer, a night of three one act ballets – including the Twyla Tharp (about which I have written here, here and here). I am conceivably hooked on this piece.

In between I am going to the Stanislavski-Nemirovich-Danchenko to see (fourth time?) them dance Chaika.

Tartarstan - a quick shout out: spin-merchant, Mmd, has published a regional guide to Tartarstan. Fascinating place: and to think at one time its secession was considered much greater a threat to the survival of the Russian Federation than Chechnya’s. Much redistribution of assets there right now and plenty of investors piling in. My humble advice? You need brass balls to invest there. Potentially very high returns 'tis true; potentially, also, huge political risk 2009 onwards: ‘velvet-reprivatisation’ definitely a risk.

Trivia: it seems that Barak Obama and the Tartastani share nearly the same catch motto (Buldırabız! - We can!), or so it seems…

Nerd that I am, I am staying up until the small hours to watch the exit polls come through from the USA.

Off-topic but worth it: political zeitgeist for the post-hiphop generation

If I were a US Citizen, I would undoubtedly be a registered Democrat, and a political-factoid nerd. I love elections, any election - I would run a campaign for City dog-catcher if asked - but US elections are the summit of the hack-heap. By inclination, I am a Hillary fan. Sadly, then (in that context), I suspect Barak Obama has the big mo' and will triumph on Super Tuesday.

Ahead of then, this has popped up on YouTube: 'Ich bin ein Berliner' for the hip-hop generation:

Expat postcard: moody crustacea, bootboy rebels and guns

I am in a strop with Arkady Novikov: Moscow’s eponymous Restauranteur. Knowingly or not I kind of live in his elitny eateries, for both business and pleasure. Last night I was having a crab-fest at Nedal'nij Vostok – Kamchatka crab at its best – with a tiny splurge of Beluga which, if not ecologically-PC, was damned fine. Life in Moscow without Novikov restaurants would be much less onctueuse.

Nedal'nij Vostok is cuisine-butch. Go for one of the tables near the central, open-plan kitchen and watch the kitchen floor-show. Watching a live lobster being sashimied is a curious experience. The chef took one lobster after another, lovingly stroked each down the back of its shell with the blunt side of the knife, before dispatching it, Roman-style, tip of the knife’s blade quickly through the thorax. Then he sliced the still-moving lobster in half, from jaw to tip of the tail. After being bisected, the legs still move for quite a while. My fellow diners were horrified, but I was fascinated, and vaguely recall its movements are more reflexive than brain-driven. Aesthetically this is gunk-free slaughter.

So why the strop with Novikov? My favourite deli in town, Globus Gourmet, has stopped accepting Novikov discount cards. Added to the fact that neo-Novikov joints, Vanil and Indus, have also stopped taking the cards, frankly I have to question why I shell out RUR 10,000 for it (10% off restaurant bills, 5% off shops, caterers and …er…a luxury florist). My card expires in April and I am not sure I shall bother to renew it.

The other day, after a breakfast meeting in (Novikov's) Vogue Café, I decided to drop into the Marriott Aurora Hotel to have my shoes cleaned by the boot-black there. Every two weeks or so I send my housekeeper to the Aurora’s boot-black, with all my boots and shoes (other than the ones I am wearing) to be cleaned. It is an indulgence of the essential, ordinary kind. Especially in a city whose streets are as filthy as Moscow’s in winter.

Incidentally I am nervous about the phrase boot-black: I hope it means ‘one who blackens boots’, rather than ‘the black person who cleans your boots’. The phrase being originally American, I am uncertain as to its proper etymology. But, anyway, bootblack is the phrase I use: shoe-shine boy sounds ridiculous after-all.

My capitalist-but-liberal sensitivity is enhanced by the fact that, in Kyiv, the rather ancient bootblack I prefer is, actually, black (remember seeing a non-white face in Kyiv is rare indeed). And fascinating.

Originally he was a Moscow-backed rebel leader fighting for the MPLA in Angola in the 1980s, but then he found himself in exile in the Moscow of the USSR. Somehow he ended up in Kyiv, with wife and child, just as the USSR collapsed and his Moscow-pension disappeared with the Great Struggle. So there he is today – half a planet a way from the home from which he is exiled and can never go back, his patron-state having disappeared – seemingly utterly forgotten. And now he cleans shoes at the Dnipro Hotel in Kyiv. He does an excellent job, BTW. Tip generously. His life story is well worth hearing.

PS: go the Dnipro hotel only for your shoes to be cleaned. It is an awful dive: more whorehouse than hotel; although very popular with regional government officials; Scandinavian engineers and – oddly – Italian importers. The restaurant is Soviet-era ghastly.

This week has proven very long, but somewhat typical of Moscow-business-season. I particularly enjoyed the 20.30 meeting (which went on until 23.45) close by the airport; at the office of a mini-oligarch. I counted 7 armed guards from entrance to boardroom: you don’t see as many armed guards as you used to in Moscow offices. The city is getting soft. Or more subtle.